Dell Makes a “Mockery” of Court System; eDiscovery Ineptness Earns Dell Contempt of Court and $25,000 Fine

First Louisiana State Court Judge Rosemary Ledet found Dell in contempt of court; then she accused Dell of making a “mockery” of the system; and then, to give her statement some teeth, she hit Dell with a $25,000 fine. Granted, a $25,000 fine is not a huge sum of money for a company like Dell and it certainly was a lot smaller than the $182,000 requested by Plaintiff’s attorneys. But the tongue lashing and ensuing fine should serve as a wake-up call to all size organizations that judicial patience in regards to eDiscovery is running thin and callous or indifferent attitudes towards eDiscovery are no longer being tolerated.

Judge Ledet’s admonishment of Dell’s actions as “unconscionable” was due to Dell’s response to an eDiscovery stemming from a current civil lawsuit. The lawsuit, Active Solutions, LLC and Southern Electronics Supply, Inc. v. Dell, Inc., has centered over a New Orleans crime camera system. The case was brought by Active Solutions and Southern Electronics in 2007 against Dell claiming that the surveillance system Active Solutions had developed had been misappropriated by the City of New Orleans technology department and that it then conspired with Dell to acquire the system.

As details of the case have unfolded several eDiscovery areas of interest have emerged. A significant component of the case revolves around whether Michael Dell knew about the pending sale of camera equipment to the city of New Orleans and if the issue of security cameras came up between him and New Orleans Mayor Ray Nagin in a meeting that allegedly occurred in June 2004. Michael Dell and Ray Nagin do not recall this meeting but a former Dell employee disputes that claim and stated in an affidavit that the meeting did in fact occur on or about June 21st, 2004.

During the course of this hearing Judge Ledet has ordered the recent deposition of Michael Dell. Judge Ledet has also sided with the Plaintiff’s attorneys in their claim that Dell had provided “piecemeal” production of eDiscovery documents and that specific key word searches for words such as “camera” were not done across its email archives on emails that may have been sent to Michael Dell.

Dell has countered by stating they have acted in good faith and provided over 160,000 documents. Judge Ledet did not agree and ordered a search of Dell email and documents using specific words. Once the results are known then the two sides can discuss how to move forward.

This case definitely is NOT a text book example of how to respond to an eDiscovery request especially from a company with the branding and resources that Dell enjoys. If anything, this is an indictment of Dell’s own email archiving and management software that it purchased and has owned for some time. This case is exemplary if no other reason then it illustrates what not to do when confronted with litigation involving eDiscovery.

Any company involved in litigation is now expected to provide those documents relevant to the case, and as this case involving Dell highlights, that information more often than not resides in email. Using products such as Estorian’s LookingGlass companies can archive and retain email messages and then do keyword searches across these archives. Using LookingGlass to search and present only relevant email not only reduces costs, but avoids the piecemeal presentation of documents Dell is accused of providing.

I find it surprising to see Dell in contempt of court and being accused of making a mockery of the court system, as well as its own ineptness in providing the documents needed to satisfy its eDiscovery obligations. But, what is more surprising is Dell’s lack of keyword search capabilities and inability to present relevant information in a timely manage, especially given that they own a software that allegedly can perform these tasks. Using products such as LookingGlass give companies the ability to answer eDiscovery requests and avoid the ramifications of court ordered sanctions that can often be very costly.

The court’s harsh words towards Dell did not lead to expensive sanctions (this time) but as the lawsuit continues to peel back the layers of what occurred in this case, that may yet occur. As this example illustrates, companies should be in a position to provide relevant emails in a timely manner because as new court cases are bearing witness, court sanctions are becoming more expensive, judges are becoming more willing to dole them out, and the inability to provided needed information can be damaging to their defense and ultimately lead to litigation losses.

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